Thursday, June 13, 2013

MN Economy Growing Fast

The Big E on MPP seems to be complimenting the excellent job the Republicans did while they were running the state. 

I mean of course the Big E states that it was Dayton's hard work that resulted in the good growth news, however we do know that he was unable to get anything done during his first 2 years as Governor.  Or that is what the Liberals kept saying whenever the GOP blocked his agenda.

So by my logic, if things are going well it must be due to the GOP's low cost low tax policies. Of course now that the DFL and Dayton have changed policy to raise spending and taxes, we should be ables to see the result in a year or two...  But not yet.

Thoughts?   

MPP MN has one of the Fastest Growing Economies

10 comments:

Anonymous said...

Minnesota has one of the worst business climates in the nation. I certainly don't dispute that. Yet the Minnesota economy is performing well, far better in many cases where the the climate for business is much better. Even the businesses that claim they want to leave the state, are threatening to move to Hudson, not Milwaukee, so they can continue to be close to Minnesota.

Maybe business climate isn't everything.

--Hiram

John said...

Or maybe having the GOP curbing cost and tax increases kept it tolerable?

Laurie said...

I agree with Hiram - it seems the most obvious conclusion from this data is that high taxes do not necessarily ruin the business climate.

I think slightly higher taxes for more well funded schools will also have no negative effect on business climate.

John said...

Only time will tell.

"I think slightly higher taxes for more well funded schools will also have no negative effect on business climate."

So how many times can you go to that "well" before they are too high? How would we know?

Laurie said...

you have an irrational fear of tax increases.

Price of Government Declines Under the Dayton Budget

John said...

I'll have to do some more research on this metric, since it seems odd that one would need to raise rates to increase revenues... Revenues should go up with the GDP...

Any idea why they would not?

Laurie said...

how it looks to me is with the growing economy revenues are going up and with the dfl tax increase revenues are going up a bit more than they would otherwise but the rate is still less than the rate of growth in personal income hence the price of govt is going down.

the part of the graph I am curious about are the big changes in the price of govt in 2009 and 2010

John said...

MMB Report

The interesting thing is the State increased by 43.5% between 2003 and 2013, whereas the local was only 33.8% and the schools were 30.6%...

Meaning the "state" POG went from 12.6% to 13.2%, Local POG went from 6.2% to 6.4% and the School POG went from 4.7% to 4.5%.

I only grabbed these 2 points because they were the first and the current. POG 15.2% to POG 15.6%.

So apparently the plan is to keep raising the "state" POG and our state taxes instead of forcing the locals and schools from asking their local citizens to pay more?

Why again do we want to push the revenues and spend to a more distant and less efficient level?

The only reason I could see the forecasted POG as being lower is that there are school referendums that will run out and need to be renewed. And until they are the MMB could not count them in the forecast. Make sense?

Per your curiousity, revenues were excessively good in CY2008/FY2009. Up ~12 mil from both the year before and after it.(ie $216,840,750, $228,070,000 $216,267,000) And the spend was slightly below the previous year.

Note: Remember they are using the trick of graph scaling to make the changes look larger than they are.

John said...

One more thought before bed. I wonder what impact it will have if the price of agricultural commodities drop? The farmers have been paying an abnormally HUGE amount of capital gains, property tax and income tax during the last decade. I guess that is good for them and good for us. I hope the gravy train doesn't slow to fast or our POG may increase quickly.

jerrye92002 said...

My guess is that the increased taxes will result in LOWER revenues to the State, as people adjust their habits accordingly. It's already happening. As I have told the marketing department many times: You either give the customer what they want or they will quietly go down the road to somebody that will. They won't complain; you may not even notice at the time, but eventually you will.